The fast-food chain said Tuesday that it earned $49 million, or
36 cents per share during the period that ended in late June. That
compares to last year’s net income of $58.9 million, or 43 cents
per share.

The company also got a smaller tax benefit than last year.

Revenue slipped 1 percent to $623 million.

The earnings beat Wall Street forecasts, but revenue fell short.
Analysts surveyed by Thomson Reuters expected the company to earn
34 cents per share with revenue of $635 million.

The earnings were “better-than-feared” while revenue was
sluggish, R.W. Baird analyst David E. Tarantino told investors in a
research note.

Sales at restaurants open at least a year slid for the fifth
consecutive quarter. That key indicator of a restaurant chain’s
performance excludes growth at stores that open or close during the
year. The measure fell 0.7 percent around the globe and 1.5 percent
in the U.S. and Canada.

While the declines weren’t as steep as those recorded in
previous quarters, Burger King continued to lag its bigger
competitor, McDonald’s Corp.

Burger King has been particularly vexed by the economic downturn
as layoffs and high unemployment hurt its core demographic of young
men. Its tried to compensate by expanding its menu with items that
appeal to both budget-conscious customers and those willing to
spend more.

On Tuesday, the company said that effort is showing some success
as customers in North America bought its $1 menu items like a
breakfast muffin and a double cheeseburger. But customers also
gravitated toward some more expensive dishes too, like the
company’s breakfast bowl, Whiplash Whopper and ribs.

Burger King said it expects worldwide sales from restaurants
open at least a year to continue to face pressure next year because
of the economy, something Janney Capital Markets analyst Mark
Kalinowski said could also hurt earnings per share.

“We believe that same-store sales improvement is not likely in
the near term … given continued high unemployment that is
particularly detrimental to Burger King’s core customer base, the
young male,” he wrote in a research note to investors.

For the full year, Burger King earned $186.8 million, or $1.36
per share. That’s down 7 percent from last year’s net income of $
200.1 million, or $1.46 per share.

Full-year revenue slipped 1 percent to $2.50 billion.

“In fiscal year 2010, we faced sustained levels of high
unemployment and a fragile global economy that combined made this
one of the toughest operating environments in recent history,”
Chairman and CEO John Chidsey said in a statement.

Burger King is based in Miami and has more than 12,000
restaurants around the globe.

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